Housing minister Grant Shapps said he will establish a community fund to pay for energy projects, like wind farms and district heating schemes to off-set carbon emissions from housing schemes.

Builders and developers could pay into this rather build an individual generation scheme for each site.

Developers are allowed to offset 30% of a new development’s carbon emissions offsite, the so called “allowable solutions”.

Minimum standards for energy efficiency measures such as cavity wall insulation will also be set through future revisions to building regulations.

These will be based on those revisions outlined in a recent consultation on the Code for Sustainable Homes, which set key benchmarks for the sustainability of new homes.

Mr Shapps also confirmed £600,000 will be released to fund the Zero Carbon Hub, which has been tasked with testing new benchmarks for carbon emission reductions.

Shapps said: “This is about meeting tough environmental standards, but not dictating how every home should be built.

“Councils and developers together are in the best position to decide how best to meet these standards, so we are looking at giving them the flexibility and a range of options to do this.

He added: “We are committed to all new homes being zero-carbon from 2016, and have the right mix of measures in place.

“First and foremost a zero carbon home must use as little energy as possible, which is why I will shortly announce a minimum standard for key energy efficiency measures like loft and cavity wall insulation.

“And to ensure the benchmark for carbon emission reductions is both ambitious and achievable, I look forward to seeing the results of tests the Zero Carbon Hub will conduct over the next few months.”